True Protectionism vs Crony Capitalism
Part 1: Reasons for Embracing Protectionism

2,253 words

Nothing destroys a good idea so efficiently as success—not so much the success of the idea itself as much as the success of those, politicians mostly, who claim to be implementing it. This is why in Russia advocating privatization is more likely to get you punched in the face than listened to, “privatization”[1] having been neoliberalspeak for moving away from communism by having Russian communist Jews invite their Western coethnics to come and help them loot the nation’s wealth via crooked inside dealing.[2]

Truly moral privatization, on the other hand, would have involved forcefully but gradually dissolving the communist system by allowing private citizens to begin trading amongst themselves in the open (they had been doing so clandestinely since the beginning of communism, of course) and without state interference, allowing them to accumulate the experience needed to take the reins of Russia’s economy themselves. Too often sound and noble concepts are like beautiful women born among bourgeois intellectuals and initially admired until given flattering attention by the elites who then rape and whore them until they’re despised and rejected by the masses who have no idea what they were originally like.

Since Trump’s recent ascendance, the same could happen to protectionism, a concept which long before Trump was divided into many different forms, some far less sound than others. Indeed it might be said that protectionism divides the dissident right the way that immigration once divided and is again beginning to divide the left (the split being mostly between those who want to restrict immigration to help the working classes and those who want to open the floodgates out of misplaced pity for nonwhites and/or outright malice for whites). Those who enter the dissident right via libertarianism and retain a (mostly healthy) distrust of the state tend to distrust or outright despise protectionist measures, while those who did not come that route or who did but have fully burned those bridges are more likely to be willing to give it a go, perhaps even with enthusiasm.

Coming down on the pro-protectionist (though critical of Trump’s variety) side, I hope to explain and defend my position in this essay, which was given impetus by a recent comment by longtime, erudite commenter Lord Shang. Lord Shang’s having worked, by his telling (which I have no reason to doubt), on Pat Buchanan’s election campaign in some capacity back in the ‘90s reminded me of my own journey to the dissident right, which in a slightly uncommon turn passed through protectionism (by way of Buchanan’s The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy) before moving into Austrian School libertarianism and ultimately settling in the dissident right proper. As a nationalist by temperament, I always found Pat Buchanan’s general stance and rationale for it far more congenial than Austrian School free trade, though from familiarity with the latter’s economics in general, I could see perfectly well the shortcomings and flaws of Buchanan’s specific policies. Because of this, I spent some time developing, from the ground up, Austrian-/axiomatic-/deductive-style my own economic theories, parts of which touch on the nature of protectionism and free trade. With that in mind, let me now lay out what I consider to be true protectionism, following which I’ll contrast it with the nature of the kind of crony capitalism which many politicians tout as protectionism.

To begin, let’s note the major reasons that a nation might want to engage in protectionism—whether protectionism can actually fulfill those goals is another matter, and we’ll deal with that in a minute. But for now, let’s simply lay out the major ostensible reasons for using it. Basically, there are three: economic power, military power, and cultural preservation. Let’s cover the third one, which is kind of the odd one out, first.

Although it was a severe (and self-serving) exaggeration on Karl Marx’s part that “the hand-mill gives you society with a feudal lord; the steam-mill, society with the industrial capitalist,”[3] there is no doubt that economics and technology exert strong effects on a nation’s culture, for good and evil. The biggest example of this in our own nation and time (though both the effect and notice of it go back to the early United States) might be the rural/city divide with regard to politics and culture, as was starkly on display during all of Trump’s presidential runs: as an anonymously authored article on Identity Dixie has pointed out, if during the 2020 election, had carrying a state depended on winning counties rather than the popular vote, Trump would have overwhelmingly won both Texas and Georgia (unlike the actual election outcome, which saw Georgia go to Biden and Trump take Texas by a far-slimmer margin); whether you love it or hate it, the ability of blue-hive cities to inculcate hive-mind thinking is undeniable, as is the tendency of rural folks to lean conservative (in a true sense). And, of course, it’s not simply that those of a leftist temperament migrate to the cities while those of an opposite temperament either stay behind or flee the cities (though that does play a part in it); we all know the stories about kids who had no natural inclination towards the former changing once they became immersed in big city/liberal academia culture during their stint in college. There is a collective cultural pressure in various locales, the magnification or diminution of which will be based on economic policies of the nation that, intentionally or accidentally, tilt the scales in favor of one or the other. As I said, this phenomenon is so old that even Thomas Jefferson commented on it, attempting to explain it in a chapter of his Notes on the State of Virginia:

The political oeconomists [sic] of Europe have established it as a principle that every state should endeavour to manufacture 172 for itself: and this principle, like many others, we transfer to America, without calculating the difference of circumstance which should often produce a difference of result. In Europe the lands are either cultivated, or locked up against the cultivator. Manufacture must therefore be resorted to of necessity not of choice, to support the surplus of their people. But we have an immensity of land courting the industry of the husbandman. Is it best then that all our citizens should be employed in its improvement, or that one half should be called off from that to exercise manufactures and handicraft arts for the other? Those who labour in the earth are the chosen people of God, if ever he had a chosen people, whose breasts he has made his peculiar deposite for substantial and genuine virtue. It is the focus in which he keeps alive that sacred fire, which otherwise might escape from the face of the earth.

Corruption of morals in the mass of cultivators is a phaenomenon [sic] of which no age nor nation has furnished an example. It is the mark set on those, who not looking up to heaven, to their own soil and industry, as does the husbandman, for their subsistence, depend for it on casualties and caprice of customers. Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition. This, the natural progress and consequence of the arts, has sometimes perhaps been retarded by accidental circumstances: but, generally speaking, the proportion which the aggregate of the other classes of citizens bears in any state to that of its husbandmen, is the proportion of its unsound to its healthy parts, and is a good enough barometer whereby to measure its degree of corruption. While we have land to labour then, let us never wish to see our citizens occupied at a work-bench, or twirling a distaff. Carpenters, masons, smiths, are wanting in husbandry: but, for the general operations of manufacture, let our workshops remain in Europe. It is better to carry provisions and materials to workmen there, than bring them to the provisions and materials, and with them 173 their manners and principles. The loss by the transportation of commodities across the Atlantic will be made up in happiness and permanence of government. The mobs of great cities add just so much to the support of pure government, as sores do to the strength of the human body. It is the manners and spirit of a people which preserve a republic in vigour. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution.

The famous running intellectual feud between Jefferson and Alexander Hamilton about what economic path the early republic should tread featured heavily such concerns; and indeed, our present debates may be said to be the (currently) furthest end of a philosophical and economic debate that has been flaring and receding since the founders’ time. Part of the debate, of course, involved purely economic issues, though all the greatest minds (such as Jefferson and Hamilton) taking part in the debate acknowledged that cultural issues are certainly at stake as well and must be addressed—though addressing them is an act of playing with fire and must be undertaken with extreme circumspection.

The reason it’s playing with fire is that, unlike the purely economic ones, cultural issues are not very amenable to straightforward empirical analysis, leaving far more ambiguity and gray areas for conniving politicians to exploit for their own ends, which they will relentlessly pursue, and in the process transform a true protectionist policy into a crony capitalist one. Because of that, we won’t even attempt to address cultural issues in this essay beyond making the reader aware of them, and instead focus on purely economic concerns which are amenable to cut-and-dried quantitative analysis. (In a later essay, we’ll be dealing with those thorny cultural issues.)

The other two reasons for embracing protectionism of some kind are, as I’ve said, much more clear-cut and provable or disprovable. The first is economic prosperity, whether we measure that in terms of a nation’s share of the world economy or an individual’s share of his national economy: other things being equal, most people outside of fanatical liberals (and they often adopt their counterposition only hypocritically as a virtue signal) want to see their nation’s share of the world pie as big as possible and the same for their own share of the nation’s. And while such economic prosperity does not necessarily lead individually to happiness or collectively to a culturally and spiritually high civilization capable of weathering the ages, it definitely does translate, but for the gross incompetence of politicians, into military might (whether to be used purely defensively as a republic or offensively as an empire is a separate issue).

Part of this is direct, as was the case with the US in WWII when the factories that once churned out tractors began churning out Sherman tanks; part of this is indirect, as with Saudi Arabia, which manufactures almost nothing of its own but instead uses petrodollars from the sale of its vast oil reserves to purchase the latest and best military hardware. The case of 19th and early 20th century Britain is an example of both: being the first nation to strongly industrialize allowed the British to create and sustain an army and navy capable of holding together a worldwide empire, while their embrace of free trade in both agricultural and manufactured goods both increased their economic well-being (undeniably with regard to food and agricultural products available to ordinary Britons) and increased their dependence on imported goods such that by the time of WWI, protectionist Germany rivaled them in terms of manufacturing while its submarine warfare threatened the British Isles with potential war famine as they no longer grew enough at home to feed their population.

Had Britain been able to keep its Victorian-era share of world manufacturing up to the eve of WWI, it is unlikely that it would have needed the United States’s help to overcome Germany, and to be sure, given the vast resources of the United States and the human capital of both the US and Germany, even had the British embraced true protectionism, it would not have been enough to maintain that level of economic dominance for itself, but it likely would have slowed the industrial rise of its rivals and sped up its own; and the same is most definitely true with regard to the economic decline of the US and concomitant rise (largely via the same mechanism) of China. At least, that is my contention; the Austrians and even mainstream economists would likely argue otherwise, and it is the purpose of part 2 of this essay to show why they are mistaken.

Notes

[1]For a fairly accurate discussion of why many of Mikhail Gorbachev’s so-called reforms were mostly ineffective window dressing for an attempt to save the Communist system, see the introduction to Requiem for Marx by Yuri Maltsev.

[2]Although the author wouldn’t have dared describe the situation in quite so unflattering of terms, Amy Chua’s World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability gives a decent summary of just how predominant in the Russian economy Jews became during the ‘90s looting binge. There’s actually a humorous anecdote by her in which, upon learning that six out of the seven top Russian oligarchs are Jews, her Jewish husband responded, “Only six? So who’s the seventh guy?”

[3] Marx, Karl. “The Poverty of Philosophy.” Translated by Institute of Marxism Leninism, The Poverty of Philosophy – Chapter 2.1, 1993, www.marxists.org/archive/marx/works/1847/poverty-philosophy/ch02.htm.